“What has happened is the [gaming] industry is like a baby that is not yet born, and we have a regulator already. Normally, it’s the other way around”, said Vishal Gondal, the founder and CEO of GOQii, about e-sports during MediaNama’s discussion on the Online Gaming Bill. On August 22, 2025, the President gave assent to The Promotion and Regulation of Online Gaming Act, 2025, after both houses of Parliament passed it. 

This legislation imposes a comprehensive ban on all online games involving monetary stakes, encompassing both games of chance and skill. Platforms like Dream11, MPL, PokerBaazi, and others offering real-money games have shut down following the enactment of the bill.

Simultaneously, the bill recognises e-sports and online social games as distinct categories. E-sports are defined as competitive, skill-based games played in virtual arenas with recognised rules and standards.

The Bill defines online social games as casual, skill-based digital games designed for entertainment, learning, or social interaction. These games may include one-time payments or subscriptions but prohibit wagering or monetary stakes. The government aims to promote these sectors by establishing a National Authority to oversee and regulate them. 

During our discussion on the bill, the panelists debated the impacts of the bill on non-money games such as e-sports and online social games, how the regulating authority prescribed in the bill would work, and how monetisation mechanics in these games, like lootboxes, could be looked at. 

Will In-App Purchases Be Allowed?

Jay Sayta, a technology and gaming lawyer, referred to the definition of “other stakes” in the bill when answering a question from an audience member on in-game purchases and their legality under the new bill. “Money is important but there has to be both elements. You are paying something in expectation of winning something in return. Purchases by way of registration fees or one-time fees where there is no monetary reward in return will probably not fall within the definition of an online money game. However, if there are both these things combined, depositing or paying money in expectation of winning money, then it falls within the definition of online money games”, Sayta explains. The authority prescribed in the bill will make this distinction. 

Specifically, Sayta also referred to loot boxes and gacha mechanics where players could sell and trade in-game cosmetics for money on third-party platforms. “In other words, the definition is quite broad. But this is something that is not being done by the platform itself. There is a separate marketplace, so the platform will most likely not be liable for this. Loot boxes are again a contentious issue. If there is both an element of paying something to get these rewards, then loot boxes could be problematic,” Sayta adds.

Nikhil Pahwa, the founder of MediaNama, said games around the world use in-game purchases as a monetisation method. “I do feel that we need monetisation mechanisms outside of advertising and subscription for gaming companies. If there are loot boxes, there can be regulations around how they’re supposed to operate. In-game purchases that enhance gameplay or allow people to upgrade their gameplay are a part of the legitimate monetisation mechanisms of games across the world,” he says. “If every game has to be approved by a regulator, that will kill the gaming industry,” Pahwa stresses.

The Classification Of Games

Dhruv Garg, a lawyer and technology policy advisor, pointed out that the bill requires recognition under the National Sports Governance Act, but it does not yet recognise e-sports. He explains, “On esports, there are six terms that they’ve given in the Act. The only interesting thing is that what they’ve said is that under the new National Sports Governance Act, it has to be a recognised game. The challenge that I see is that, till now, mostly federations are recognised.” He points out that only sports federations have been recognised, and there is no recognised e-sports federation. 

Garg also points to another issue with the definition of e-sports, which is that it needs to be a part of multi-sports events. “There’s also a condition that it has to be a multi-sports event. Tomorrow, if I want to organise a BGMI or another Esports tournament, that will not qualify because that will not be multi-sport, that will be a single sport”. This is also relevant because most major global e-sports tournaments are of one specific game. 

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However, Gondal pointed out, “there are no Indian game companies with any esports game even ready in the market. Maybe FAU-G and Indus games”. He adds that the e-sports industry is at a very nascent stage in India, and that he thinks “at this stage the government needs to consult with the nascent gaming industry and create the environment so that firstly we promote game development“. 

Where the Online Gaming Bill Can Be Amended

Gondal argues that the bill in its current form was designed to “completely block real money gaming and their proxies. And now they may require some tweaks, and we are very confident that the government will be more than supportive to do these tweaks to ensure that real games, which are real for fun and esports, both as an industry grow”.

Garg said policymakers must simplify the way they define and categorise e-sports. “I would say simplification of that is definitely something that we need to look for in a wish list, at least the sports ministry should also come and speak to us about what they are thinking about a little bit on the esports front. That is definitely something that we love to have”, he says. 

He also points out that the nuanced revenue streams in games might be difficult for the authority in the bill to recognise and classify. “Let’s look at giving awards in terms of more tokens or loot boxes for in-game purchases. The question is, will the authority go into every question before giving approval? And if that is the case, will every company have to travel or sort of give a representation explaining the nuances of their revenue model and when they’re changing those revenue models?” Garg explains. He further points out how problematic this will be for smaller indie developers. 

An audience member crystallised the issues with the current bill and the authority, saying there is a need for “regulatory interaction that actually clarifies operational designs of the way money flows through platforms or games and a standard set of terms so that we can have a standardized framework in terms and conditions as well as terminology for how money is exchanged or received or winning is exchanged or received on platforms”. 

Watch the full discussion here: 

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